Bitunix Analyst: Fed Credibility and Yen Intervention Reshape Global Asset Pricing

Huo Xing Finance reports: On August 3, last week saw clear divergence in global markets. Tech giants’ earnings reports continued to demonstrate that AI capital expenditures have not slowed, with Microsoft, Google, and Amazon driving a strong rebound in the semiconductor sector. South Korea’s semiconductor exports rose nearly 180% year-over-year, and the KOSPI posted its largest single-day gain in history, indicating that markets have not rejected the long-term growth thesis for AI—but are instead reselecting companies with genuine cash flow and profitability. However, the primary driver of global asset prices is gradually shifting from corporate fundamentals to the repricing of capital costs. The Federal Reserve held rates steady in July, yet three officials publicly advocated for rate hikes. Meanwhile, Walsh’s suggestion to reduce FOMC meeting frequency and further weaken forward guidance has forced markets to interpret economic data with less clarity, causing long-term U.S. Treasury yields to rise sharply. This reflects not an expectation of higher rates, but a growing demand for higher risk premiums and a reassessment of the Fed’s credibility in controlling inflation. As the 30-year yield hit a multi-year high, even fundamentally strong high-valuation assets face increased discounting pressure. On another front, the rare coordinated intervention by Japan and the U.S. to stabilize the yen signals another major shift in global capital markets. Japan is no longer merely defending its exchange rate—it is seeking to prevent further yen depreciation from destabilizing its bond market and, through U.S. Treasuries, transmitting contagion to the global financial system. If U.S.-Japan coordinated intervention continues, it will increase pressure to unwind carry trades, exposing global liquidity to new contraction risks. Thus, the significance of the yen episode lies not in the currency itself, but in the fact that the world’s largest source of carry funding is now coming under policy constraints. Meanwhile, geopolitical signals from the Middle East remain contradictory. Although U.S.-Iran negotiations have made progress, both Iran and Israel maintain hardline positions, and the reopening of the Strait of Hormuz remains unresolved. The recent short-term drop in oil prices reflects a temporary reduction in market risk premiums rather than a resolution of geopolitical risks. As long as energy supply remains uncertain, the Fed will struggle to ignore the pressure from imported inflation. This week, markets will receive key data including ISM, JOLTs, ADP, and non-farm payrolls. Earnings reports from Palantir, AMD, and SpaceX will also provide critical validation on whether AI demand continues to expand. Yet, more than whether companies deliver strong results, markets are now focused on whether high interest rates, elevated yields, and shrinking global liquidity are beginning to erode risk asset valuations. In the coming period, what truly determines market direction will no longer be whether companies can grow—but whether global capital remains willing to pay higher capital costs for high valuations.